Lighthouse Group and International Consolidated Airlines Group may be trading at prices below their likely values. This suggests that these stocks are undervalued, meaning we can benefit when the stock price moves to its true valuation. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Lighthouse Group plc (AIM:LGT)
Lighthouse Group plc provides financial advice to retail and corporate customers, and regulatory authorization and related services to financial advisers in the United Kingdom. Formed in 2000, and run by CEO Malcolm Streatfield, the company now has 140 employees and has a market cap of GBP £23.37M, putting it in the small-cap stocks category.
LGT’s shares are currently hovering at around -41% lower than its true value of £0.32, at a price tag of £0.19, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy LGT shares at a low price. Furthermore, LGT’s PE ratio stands at around 8.1x while its capital markets peer level trades at 17.2x, suggesting that relative to its comparable company group, you can buy LGT’s shares at a cheaper price. LGT is also strong in terms of its financial health, with current assets covering liabilities in the near term and over the long run.
International Consolidated Airlines Group, S.A. (LSE:IAG)
International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world. Established in 2010, and run by CEO William Walsh, the company now has 63,240 employees and with the market cap of GBP £13.68B, it falls under the large-cap stocks category.
IAG’s stock is currently trading at -55% less than its intrinsic value of €14.78, at the market price of €6.65, based on my discounted cash flow model. The mismatch signals a potential chance to invest in IAG at a discounted price. Also, IAG’s PE ratio is around 8.1x while its airlines peer level trades at 8.7x, indicating that relative to other stocks in the industry, we can purchase IAG’s shares for cheaper. IAG is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run.
Bagir Group Ltd. (AIM:BAGR)
Bagir Group Ltd., together with its subsidiaries, designs, develops, manufactures, and markets men’s and women’s tailored fashions in Europe, the United States, and internationally. Founded in 1961, and run by CEO Eran Itzhak, the company size now stands at 1,050 people and with the company’s market capitalisation at GBP £8.23M, we can put it in the small-cap category.
BAGR’s stock is now floating at around -48% less than its value of $0.06, at a price tag of $0.03, according to my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Also, BAGR’s PE ratio is currently around 0.8x compared to its luxury peer level of 25.2x, suggesting that relative to other stocks in the industry, we can invest in BAGR at a lower price. BAGR also has a healthy balance sheet, as short-term assets amply cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 16% has been declining over time, indicating BAGR’s ability to pay down its debt.
For more financially sound, undervalued companies to add to your portfolio, you can use our free platform to explore our interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.